(Bloomberg) — Kazakhstan’s KazMunayGas National Company JSC is bidding to purchase the Bulgaria-based refinery of Russia’s Lukoil PJSC, according to two people familiar with the negotiations.
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Litasco SA, the main shareholder of Lukoil Neftohim Burgas AD, and its affiliate have already accepted binding offers from several potential buyers, with KazMunayGas among them, the people said, asking not to be named because the talks are private. The Kazakh company is discussing financing for the potential acquisition with Vitol Group, the world’s biggest independent oil trader and a major player in Kazakhstan.
KazMunayGas expects the sale process to take about a month, one of the people said. The price could be around $1 billion, and even though Litasco is not sanctioned, a condition of the sale is a guarantee that the money won’t be transferred to Russia, the person said.
KazMunayGas, Lukoil and Bulgaria’s Energy Ministry didn’t respond to requests for comment. A spokesperson for Vitol declined to comment.
In 2023, Bulgaria decided to ban imports of Russian oil, in line with similar moves across Europe following the invasion of Ukraine. As a result, the share of crude from Kazakhstan processed in the country grew to around 40%, with the rest coming from the Middle East.
Lukoil, Russia’s second-largest oil company, has been considering the sale of southeastern Europe’s biggest refinery and the associated fuel-retail business in Bulgaria since 2023, citing “discriminatory laws and other unfair, biased political decisions toward the refinery.”
Hungary’s Mol Nyrt. is also bidding for the Bulgarian plant, Hungarian Prime Minister Viktor Orban said in December. Mol declined to comment on his statement.
KazMunayGas is seeking support for its bid from the Bulgarian government, arguing that the refinery was designed to process Russian oil of a similar quality to Kazakh crude, the people said. Should its bid be successful, the company says it will provide Kazakh oil to the refinery on the best possible terms, arguing that other proposals can’t offer such stable supply, according to the people.
The Bulgarian government “is monitoring the process closely, but it cannot have a direct involvement in the change of ownership, as at the moment there is one majority private owner,” Energy Minister Vladimir Malinov told reporters on Dec. 23.
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–With assistance from Nariman Gizitdinov, Veronika Gulyas, Slav Okov and Archie Hunter.
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